Bain to advise on integration of Abu Dhabi's two biggest lenders

Abu Dhabi’s National Bank of Abu Dhabi and First Gulf Bank announced earlier this year that they would integrate into a new $175 billion entity. The new entity is better able to leverage its clout to support regional governments and businesses weather the commodity price storm. Bain & Company has been provided a lead advisory role in the integration of the two institutions.

The National Bank of Abu Dhabi was founded in 1968 and is one of the largest banking products and services providers in the United Arab Emirates (UAE) and the largest in Emirate of Abu Dhabi. Today, it has a global presence, active in 17 countries across the globe.

First Gulf Bank was founded in 1979 and is headquartered in Abu Dhabi. The bank, the third largest third largest bank in the UAE, provides a range of banking products and services in the region and globally, through a network of representative offices in, among others, Hong Kong, India, Korea, the UK, Singapore and Qatar.

The two banks recently announced that they will merge into a regional powerhouse with $175 billion in assets. The combined organisation will, according to the partners, be better positioned to support regional businesses and state owned enterprises weather the storm as they continue to be buffeted by relatively weak oil prices, which have fallen 50% since 2014 added to the likely trillions missed in lost projects by the sector overall. The UAE holds around 6% of global oil reserves, from which it draws a considerable portion of its income, and has begun more aggressively cutting spending and dipping into its vast cash reserves.

The slump in oil price has been a considerable boon for consultants in the GCC region, who have been called into a range of projects to transform businesses and regional economies to become more streamline and diverse. Saudi Arabia in particular is seeking to transform its economy, and called in McKinsey & Company and The Boston Consulting Group, among others, to support that transformation. Kuwait too has recently had support from consultancy firm Oliver Wyman, as part of a bond funding round.

Bain & Company too has gotten in on consultancy action for major players in the GCC, and has recently been able to add another high profile engagement to its portfolio. According to anonymous sources speaking to Bloomberg, the management consultancy is holding a lead advisory role in the integration of The National Bank of Abu Dhabi and First Gulf Bank, which is expected to be completed by Q1 2017. This is the second large integration project the firm has worked on in recent months in the region – Bain is also working on the integration of Abu Dhabi’s International Petroleum Investment with Mubadala Development.